Apex Court ruling to clear the way for private participation in ports

Will the AP Moller Group (Maersk) get to bid for the fourth container terminal at the Jawaharlal Nehru port?

Will PSA (Port of Singapore) be considered eligible for another terminal at the Tuticorin port?

Will the Government policy preventing monopoly at ports be continued?

All these questions will be cleared later this month, when the Supreme Court delivers its verdict on a petition challenging the Government policy on private participation in major ports.

According to a JN port official, the verdict will also remove the uncertainty over the award of the contract for the fourth container terminal at the port which has been pending for nearly two years.

AP Moller, which is running the third terminal at the JN port, was barred from bidding for the fourth terminal.

(The third terminal is run by Gateway Terminals India - a joint venture between APM and Concor).

According to the Shipping Ministry Guidelines, an operator of a terminal at a major port will not be allowed to bid for a subsequent terminal at the same port.

AP Moller moved the court challenging the JN port's decision, saying that the original bid document did not have the clause and it was added subsequently.

As the Bombay High Court upheld the port's decision, the terminal operator appealed to the Supreme Court.

“The hearing of the case is now over and we have also made the written submissions as directed by the court. We are now awaiting the verdict which is expected anytime now,” said the port official.

PSA-Sical at Tuticorin

In the case of Tuticorin, a consortium of PSA-Sical was barred from bidding as it was already operating another terminal at the port. The consortium moved court.

The Supreme Court has decided to club the two cases as the Union Government is a party to both and the cases are related to same Government policy. According to a port sector analyst, the court verdict will be crucial as it will decide whether an existing terminal operator is eligible to bid for a second one at the same port.

It will also pave for awarding the contract for the fourth terminal at the JN port. “We are ready to award the contract, only awaiting for the court order,” said JNPT official

The argument in favour of the existing port operators is that if a single operator is allowed to operate more terminals, it will bring in economy of scale which will eventually help not only the operator but also the port users.